Question

Exercise 15-06 a-b (Video) A job cost sheet of Sunland Company is given below. JOB NO. 2,000 7/2 ITEM FOR 7/31 Manufacturing Overhead Date 7/10 Job Cost Sheet 469 Quantity White Lion Cages Date Requested Todd Company Date Completed Direct Direct Materials Labor 700 900 500 400 1,660 1,560 500 600 480 600 Cost of completed job: Direct materials Direct labor Manufacturing overhead Total cost Unit cost

Answer 1

1. The source documents are:

Direct materials – Material requisition slips

Direct labor- Time tickets

Manufacturing overhead – predetermined overhead rate

2. The predetermined overhead rate = Manufacturing overhead/direct labor

Computing on various dates i.e. 600/500 or 480/400 or 600/500, predetermined overhead rate as required would be 120% of direct labor hours.

3. The computation of total cost and unit cost is given below :

Particulars	Amount ($)
Direct materials (700 +900 + 1660+1560)	4,820
Direct labor (500+400+500)	1400
Manufacturing overhead (600+480+600)	1680
Total costs	$ 7,900
Quantity as given	2,000
Unit cost (7900/2000)	3.95

4. The required journal entry would be:

Date	Particulars	Debit ($)	Credit ($)
31 July	Finished Goods Inventory	7,900
	Work in Process Inventory		7,900
	(To record the completion of product)

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